PBOC Releases China Monetary Policy Execution Report for Q2 2026
The People's Bank of China released the Monetary Policy Execution Report for the second quarter of 2026, clarifying the continued implementation of a moderately loose monetary policy. The report emphasizes enhancing the forward-looking nature, flexibility, and targeted approach of policies, strengthening coordination with fiscal policy, and supporting stable economic growth and high-quality development. It aims to maintain ample liquidity through the comprehensive use of monetary policy tools, promote reforms in the operational framework, reduce overall social financing costs, and increase financial support for key areas such as expanding domestic demand, technological innovation, and small, micro, and medium-sized enterprises
Continue to effectively implement a moderately loose monetary policy. Enhance the forward-looking nature, flexibility, and targeted approach of policies. Based on domestic and international economic and financial conditions and the operation of financial markets, appropriately manage the intensity, pace, and timing of policy implementation. Strengthen coordination with fiscal policy to support stable economic growth, high-quality development, and the smooth operation of financial markets.
Comprehensively utilize and timely adjust monetary policy tools to maintain ample liquidity and relatively loose social financing conditions. Guide the growth of social financing scale and money supply to align with economic growth and the expected target for the general price level.
Steadily and orderly promote the reform and improvement of the monetary policy operational framework to better guide short-term money market rates to run smoothly around the policy rate. Leverage the role of the self-disciplinary mechanism for market interest rate pricing, strengthen the implementation and supervision of interest rate policies, promote the diversification of loan pricing benchmarks, and guide financial institutions to improve their interest rate pricing capabilities. Continuously deepen the work on explicitly disclosing the comprehensive financing costs for corporate loans, reduce intermediate financing fees, and promote the operation of overall social financing costs at a low level.
Give full play to the dual functions of monetary policy tools in terms of aggregate volume and structural adjustment. Implement the series of monetary and financial policies introduced at the beginning of the year, continuously improve tool design and management, diligently perform the "five major articles" of finance, and strengthen financial support for key areas such as expanding domestic demand, technological innovation, and small, micro, and medium-sized enterprises.
Adhere to the managed floating exchange rate regime based on market supply and demand, with reference to a basket of currencies. Maintain exchange rate flexibility, leverage the exchange rate's automatic stabilizer function for macroeconomic and balance of payments adjustments, adopt comprehensive measures to enhance the resilience of the foreign exchange market, stabilize market expectations, prevent the risk of excessive exchange rate fluctuations, and keep the RMB exchange rate basically stable at a reasonable and equilibrium level.
Expand and enrich the central bank's macro-prudential and financial stability functions, innovate financial tools, maintain the smooth operation of financial markets, and firmly hold the bottom line against systemic financial risks.
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